May 3, 2010

Public Sector v. Private Sector Employees: Higher Pay, Secure Jobs, Lifetime Benefits, Generous Pensions, No Competition, No Accountability at Taxpayers' Expense

One-third of the 2009 stimulus money went to state and local governments--an obvious payoff to the public employee unions which gave hundreds of millions of dollars to Democrats and got hundreds of billions of dollars in return, to insulate public employee unions from the effects of the recession which has affected everyone else. - Michael Barone, The Case Against the Public Employee Unions, Washington Examiner, April 20, 2010

Public Employee Unions Work Against Public Good

By Matt A. Mayer, The Columbus Dispatch
October 3, 2007

In Ohio, about 16 percent of workers are members of a union. Just under half of them work in the public sector -- state, local and federal governments.

If a group of private-sector workers is able to unionize a work site because the employer hasn't provided them with good reasons to reject the union, then good for the workers -- as long as the playing field remains level between employers and employees.

But because taxpayer funds are used to employ public-sector workers, a higher level of scrutiny should be applied when evaluating the utility of unions. After all, government workers aren't toiling in sweatshops, breathing dirty air in coal mines or picking crops on a hot summer day. Are taxpayers really expected to believe that the government is oppressing or abusing workers on a routine basis, necessitating the protection of a union? Such a claim doesn't pass the sniff test. Most public-sector employees work hard but do so in fairly pleasant conditions, such as classrooms and office buildings.

Under the coverage already provided by the litany of federal, state and local statutes and regulations, workers are protected from most workplace harms. From wage and hour laws to anti-discrimination laws to worker-compensation coverage to occupational health and safety requirements to wrongful-termination protections, the only significant items not covered are how much public-sector employees get paid, what their benefits are and how they can be terminated.

That is where unions significantly increase costs for taxpayers.

Historically, taxpayers agree to provide public-sector employees with secure employment and generous pensions in exchange for lower pay than they might earn in the private sector. At some point, someone forgot about that grand bargain. This reality was illustrated in a recent report titled, "The State of Working Ohio 2007" from the think thank Policy Matters Ohio. The authors noted that those "who were in a union earned substantially more than nonunion workers in median hourly wages in 2006."

According to the U.S. Department of Labor's most recent yearly data, public-sector employees in Ohio make more than private-sector employees. Specifically, in Ohio, the average weekly wage in 2005:
  • for a private-sector employee was $708,
  • for a local public-sector employee was $706 (about the same as private sector),
  • for a state public-sector employee was $854 (21% more than private sector),
  • for a federal public-sector employee was $1,141 (38% more than private sector).
The average weekly wage for private-sector employees was $708 -- just slightly better than local government and only 60 percent of federal workers' wage. Add in public-sector health-care benefits, secure pensions and functional lifetime employment, and no wonder government continues to grow.

The rate of government growth in Ohio over the past decade or so has been three times greater than inflation. In 2007, Ohio taxpayers face the fifth-highest state and local tax burden in the country, and the business-tax climate for job creators is the 49th worst in the country. We simply cannot continue to pay public employees increases greater than inflation, and unions certainly aren't interested in slowing the rate of pay (or dues) of their members.

Unions don't even attempt to hide this fact. The AFL-CIO, one of the largest public-sector unions in Ohio, brags on its Web site:
"Union members earn better wages and benefits than workers who aren't union members. On average, union workers' wages are 30 percent higher than their nonunion counterparts. While only 14 percent of nonunion workers have guaranteed pensions, fully 68 percent of union workers do."
The unions fail to understand a fundamental distinction between the public and private sectors. Namely, while fighting for higher wages in the private sector might be appropriate for unions, given the opposing interest of employers to cut costs in order to increase profitability; in the public sector, the employer has no vested interest in keeping wages down, given that higher wages don't affect any equivalent measure of performance like profitability. When is the last time you read about a government going out of business or laying off thousands of employees because of cost-cutting? The "employer" just raises taxes. Hence, taxpayers foot the bill as the cost of government rises higher each year.

Here's an idea: Ditch the unions, lock in wages to inflation plus pay for performance, adopt the most generous health-care policy in place today, replace pension plans with 401(k) plans starting with new workers, and apply the same protections the rest of us possess. Public-sector employees still will have it better than private-sector employees, but at least it won't cost taxpayers so much.

Public Employee Unions Work Against the Public

By Greg Hunter,
April 28, 2010

Unions in this country got started because industry took advantage of workers. But these days, it seems to be the other way around. I am not talking about unions in the private sector. Private sector union workers should be free to get what they can. If private sector unions get too much (health care, pensions and pay), it is the fault of company management.

Public sector unions are a different story all together. Public sector unions do not operate in the real world where there is profit and loss. These unions work in a world of politics and taxes. This is a place where the unions’ needs line up against the people who pay them—the taxpayer.

The unions think they are entitled to rich pensions and medical plans when they retire. If there is not enough money in a state or city budget, then they think taxes should be raised. For example, take the recent union protest over budget cuts in Illinois. A crowd of 15,000 union members were chanting,Raise my taxes!” Yes that’s right, “Raise my taxes.” Check it out for yourself in the video below:

Many public sector union members get health benefits when they retire for free or nearly free for the rest of their lives. A friend’s mother retired from a Northeast state DMV. She was a clerk. She has medical coverage for life with $2 co-pays! Her pension was just raised $4,000 a year. What clerk gets that in the private sector? It is also not uncommon for public pensions to be high 5 or low 6 figure amounts. Why should taxpayers pay for lavish health care plans and pensions that most do not get themselves?

This is an outrage that is coming to light because nearly every state in the union is facing severe budget problems. It is partly the fault of politicians who promise gold plated health and pension plans without funding them. Politicians play fast and loose with taxpayer dollars just to get a block of union votes at election time. This is why I think unions working in the public sector should be outlawed. Take California, for example, it has a $500 billion public pension problem. Less than two weeks ago, Governor Schwarzenegger called it “the single biggest threat to our state’s fiscal health and future.” Below is video from his weekly address that is stark and dire:

It is fascinating to me that this is barely covered in the mainstream media. This is a half trillion dollar problem–for just one state! Most states in the union are facing dreadful budget problems. This has been met, by and large, with a yawn from the mainstream media. States cannot print money. They haven’t been able to do that since the Civil War. So, they will be forced to raise taxes, cut services, get federal bailout money or file bankruptcy. That’s my favorite because it will wash out all the commitments; and cities, states and the unions can all start over.

Public unions across the country do not want to curb their pay, medical benefits or pensions, even though there is great pain and expense to the taxpayer and the economy. Public unions are not the entire reason states are in financial trouble, but cutting those benefits are certainly part of the solution. The good of the union cannot supercede the good of the public which pays them.

Look for more protests and backlash from unions as they are asked to take cuts. Look for more outrage and push back from the public as they are asked to pay for the lush benefits.

I predict public unions will either take some big cuts voluntarily or be forced to do so through bankruptcy. This money fight will not play well with hard working voters in the private sector this fall. Remember, the private sector is the only place where real wealth and prosperity is created. The public sector does not generate revenue, it only confiscates taxpayer money. Taxpayers need union employees to work for them–not against them.

The Unreasonable Power of Public Employee Unions

According to the Bureau of Labor Statistics, the national median wage was $32,390 per year in 2008 [due to the recession, that number has probably fallen 5 to 7 percent since then]. In March 2009, the average earnings for full-time Federal employees were $74,403 [wages in the Federal Government are projected to increase by 10 percent over the 2008-18 period].

A Rational Advocate

... By and large, public sector employees enjoy very good peripheral benefits such as those for health, disability, sick leave, life insurance, pension and job security. When calls are made by public union officials to increase salaries because they are not comparable to those in private industry, one never hears reference made to these usually superior peripheral benefits enjoyed by those in the public sector. In addition, it is well known that it is quite difficult to fire a public sector employee due to the provision's protecting their employment that are written into law.

There has been a growth of public sector unionized employment that appears to lead to a larger government and attendant higher taxes. In addition, some public sector unions are working to convert private sector non-union jobs to ones in the public sector. David Denholm, Presidentof the Public Service Research Foundation, an independent organization that studies union influence on public policy, states that the Service Employees International Union is working to convert private sector in-home health care workers to public employees and then organize them. He indicates that they have already organized nearly 80,000 such workers.

The movement to organize public employees began in 1932 and gained strength along the way with the election of liberal government administrations at all levels of government. An important administrative action occurred in 1958 when Robert Wagner, Mayor of New York City, granted collective bargaining rights to unions representing city employees. At the federal level, President John Kennedy issued an executive order in 1961 that legitimized collective bargaining for federal employees and provided the stimulus for similar action by other levels of government enabling this privelege for all public employees.

What has evolved are public unions that have greater power to effect their desires on their employers (the taxpayers) then any private sector unions that exist. They are not going to go away but their powers can be reduced. It would appear that the elimination of the power to strike would be one that should be instituted to level the playing field.

It should be obvious that allowing public employees to be unionized provides them an inordinate amount of power that should not exist since they are provided with the perks heretofore mentioned that offers them the security that private sector employees do not rarely enjoy. After all, all employees in the public sector are supported by the taxes paid by those employed in the private sector. Why should taxpayers in the private sector, that provide the funds to support those in the public sector, be economically penalized by way of legally allowed inequitable labor practices? The right to strike provides the ultimate power to effect the public employee union's demands the same as if they were to hold a gun to the head of taxpayers.

A Government Run By and For the Public Employee Unions
California's Big Pension Increases Bite Back
The Beholden State: How public-sector unions broke California
The Big-Spending, High Taxes, Lousy Services Paradigm
1 in 3 San Francisco city workers earned $100,000

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